SteveO

When we decided to get into tanning, we did a survey of the market and found only 82 tanning beds in a metro area of about 150,000 people.

Last spring we purchased a salon that needed serious upgrading. It was located near a college of 15,000 students. During the summer and fall we renovated a new space and bought all new equipment. We opened in December with 8 beds.

I was so busy doing the buildout that I didn't even notice that on the other end of town 2 chain type salons were also under construction. They are about 3 blocks from each other and about 4 miles from me. Each has about 18 beds. I am sure that they didn't know what each other was doing when they did their market research and signed their leases. They opened in December and early January.

For about a week I was beside myself with worry because we were not going to be the "new" salon in town for very long and that the pie would be divided even more. Our newness only lasted a week.

Both salons had big splashy grand openings. One salon gave free tans for 2 days. The other gave free tans for 2 whole weeks and had lines out the door and hour long waits. Our business was down a little bit during this time but we held our position and did not try to match them or beat them. We had confidence that we had the better beds and better experience than a chain. We actually added 2 more beds in January to take care of the demand.

Student discounts: I absolutely hate the concept. When you give a discount to a certain group of people, you alienate other customers. What about the person that just graduated, or other young people that are not currently in school? If we gave a discount to students it would be about 80% of our customer base. Our prices are already forced to be a little lower based on the local demographics.

I think that fair and honest pricing go alot further for customers than alot of gimmicks. If you run a special give it to everyone. This will help build customer loyalty.